Looking for investing ideas? Here’s your weekly digest of the Globe’s latest insights and analysis from the pros, stock tips, portfolio strategies plus what investors need to know for the week ahead.
Four dividend growth stocks that fly under the radar
For Renato Anzovino, yield is overrated, John Heinzl writes. When the portfolio manager at Heward Investment Management Inc. is hunting for promising stocks, he’s more interested in a company’s dividend growth. The yield may be modest, but if the dividend is growing, it’s often a bullish sign. The strategy has produced solid results. Since the Heward Canadian Dividend Growth Fund launched a decade ago, it has posted an annualized total return − including dividends – of 9.85 per cent through June 30. That tops the total annualized return – also including dividends – of the S&P/TSX Composite Index by about two percentage points. Here’s a look at four of Mr. Anzovino’s favourites right now.
More from John Heinzl: Your questions on RRIFs, RESPs and Microsoft answered
A trio of dividend-rich ETFs that have had dramatic turnarounds and are worth buying right now
It’s almost certain that the U.S. Federal Reserve Board will lower interest rates at its next meeting at the end of the month, Gordon Pape writes. The Bank of Canada isn’t ready to follow the Fed down, at least not yet, but any further rate increases this year are unlikely. All this is great news for interest-sensitive securities, such as utilities and many dividend-paying equities. The exchange-traded funds that invest in these stocks have seen a dramatic turnaround in their fortunes. Here are three ETFs he likes right now.
Read the latest from Rob Carrick: DIY investors: Make sure you avoid the mutual fund fee trap at online brokers
Why this Canadian fund manager of $5.5-billion is betting big on health care and tech stocks (and avoiding energy)
David Arpin will pass on predicting what stock markets will do next. Investor sentiment certainly hasn’t been a good predictor lately. A senior vice-president and portfolio manager with the Bluewater team at Mackenzie Investments, he points out that investors were bullish a year ago, then the fourth-quarter correction happened. Investors were grim at the start of 2019, and markets have since surged. “Our view is that you’re always better off if you invest in companies that should do well over time, and do that consistently,” says Mr. Arpin, who manages about $5.5-billion in assets. The Globe and Mail recently spoke with him about what he’s been buying and selling.
Read the latest from Ian McGugan: Three areas for the value-oriented investor to watch when nothing is cheap
Eighteen TSX companies aggressively buying back their shares and primed to outperform
Money manager Patrick O’Shaughnessy has examined large U.S. stocks and split them into two groups: a high-conviction group that repurchased more than 5 per cent of their shares over the prior year, and a low-conviction group that bought back a lesser percentage. He formed model portfolios that tracked both groups from 1987 through 2014, and found stocks that repurchased their shares generally outperformed the market while the high-conviction portfolio beat it by an average of 4.7 percentage points annually. The findings inspired Norman Rothery to look for firms with high-conviction buybacks in the S&P/TSX Composite index using data from S&P Capital IQ. This table highlights the 18 stocks in the S&P/TSX Composite that reduced their share counts by more than 5 per cent over the past year.
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BlackRock’s chief Canadian strategist on how to invest the rest of this year (and what’s in store for the loonie and housing prices)
While the S&P/TSX Composite Index staged a major comeback at the start of 2019 and is up approximately 15 per cent year-to-date, it’s relatively unchanged from where it was one year ago, Jennifer Dowty writes. In the current environment, active portfolio management including sector rotation, stock selection and country and industry exposure diversification have become increasingly important in order achieve attractive returns. In a recent interview, Kurt Reiman, BlackRock’s chief investment strategist for Canada, shared his market expectations and thoughts on how investors may want to position their portfolios for the second half of 2019.
What investors need to know for the week ahead
Companies releasing their latest earnings in the week ahead include Amazon, Alphabet, Canadian Natioinal Railway, Rogers Communications, Coca-Cola, McDonald’s AT&T, Boeing, Xerox, A&W Revenue Royalty, Loblaw, George Weston, American Airlines, Cameco, Cenovus Energy, Twitter, Husky Energy and Maple Leaf Foods. Economic data on tap include: U.S. existing home sales for June (Tuesday); U.S. new home sales for June (Wednesday); U.S. durable goods orders for June (Thursday); Canadian budget balance for May (Friday).